GM: We're set up for 'another strong year'

(Reuters) - General Motors Co on Friday reported better-than-expected first-quarter net income driven by strong sales of its profitable large pickup trucks and crossovers in the United States, sending its shares up nearly 2 percent in premarket trading.

No. 2 U.S. automaker Ford on Thursday reported lower quarterly net profit due to higher commodity, engineering and recall costs, and a drop in vehicle sales.

GM's results come at a time of uncertainty for the U.S. auto industry following disappointing sales in March.

New vehicle sales hit a record of 17.55 million units in 2016, and analysts expect a slight sales decline in 2017.

Ratings agencies have warned of worsening credit and there are concerns millions of nearly new leased vehicles due to flood the market over the next couple of years will depress used-car values and hurt U.S. automakers' sales. Some analysts worry that rising consumer discounts indicate waning interest by American drivers in new vehicles after a five-year run of rising sales.

Stevens said that while consumer discounts have risen, so have average vehicle prices which he said was more important.

"Clearly it's a more competitive market out there," he said. "But that's not a surprise given that the industry is plateauing."

Stevens said the No. 1 U.S. automaker will reduce inventory levels, a concern for Wall Street to around 70 days by the end of 2017 from 98 at the end of March. The company has built up inventory ahead of a planned 10-week summer production shutdown in the third quarter and new product launches.

GM said first-quarter vehicle sales rose slightly in Europe, where it has agreed to sell its European Opel and Vauxhall operations to France's PSA Group. But sales dropped more than 6 percent in the company's Asia, Middle East and Africa unit.

GM reported first-quarter net profit of $2.6 billion, or $1.70 per share, up 33 percent from $1.95 billion, or $1.24 per share, a year earlier. Analysts, on average, expected earnings per share of $1.48.

The company forecast 2017 full-year adjusted earnings per share of $6 to $6.50. Analysts expect earnings of $5.95.

In premarket trading, GM shares were up 1.8 percent at $35.15. (Editing by Jeffrey Benkoe and Bernard Orr)